Asian Shares Slide On Jitters Over New Virus Outbreaks

Asian stocks declined on Tuesday as tensions soared between Beijing and Washington, and concerns grew regarding a potential second wave of the coronavirus as several countries start to emerge from lockdowns.

China, Germany and South Korea have reported new clusters of coronavirus cases, highlighting the potential threat of reopening economies too quickly.

Chinese shares ended slightly lower as inflation data missed expectations. The benchmark Shanghai Composite Index slipped 3.25 points, or 0.1 percent, to 2,891.56, while Hong Kong’s Hang Seng Index tumbled 356.38 points, or 1.5 percent, to 24,245.68.

Consumer prices in China were up 3.3 percent year-on-year in April, the National Bureau of Statistics said today. That was beneath expectations for an annual increase of 3.7 percent and down from 4.3 percent in March.

On a monthly basis, consumer prices sank 0.9 percent – again missing forecasts for a decline of 0.5 percent after sliding 1.2 percent in the previous month.

The stats bureau also reported that producer prices tumbled an annual 3.1 percent compared to expectations for a drop of 2.6 percent and down sharply from the 1.5 percent decline a month earlier.

Japanese shares ended marginally lower, a day after Prime Minister Shinzo Abe signaled readiness to compile a second supplementary budget during the current Diet session running through June.

The Nikkei 225 Index edge down 24.18 points, or 0.1 percent, to 20,366.48 after recent gains. The broader Topix closed 0.3 percent lower at 1,476.72.

Japan has extended a state of emergency over the coronavirus until the end of May, but a review of the decision will be held on Thursday.

Toyota Motor fell 2 percent after the automaker said it expects to post its lowest annual operating profit in nine years.

Honda Motor shares tumbled 3.5 percent. After the closing bell, the firm posted a 13 percent decline in annual operating profit and declined to give earnings guidance for the current business year.

Australian markets fell sharply as fears of a second wave of contagion weighed on the mining sector. The benchmark S&P/ASX 200 Index fell 58.20 points, or 1.1 percent, to 5,403, while the broader All Ordinaries Index ended down 61.80 points, or 1.1 percent, at 5,497.30.

Miners BHP, Rio Tinto and Fortescue Metals Group dropped 2-3 percent. Energy stocks had their worst day since May 4, with Beach Energy, Santos, Origin Energy and Oil Search falling 3-4 percent.

Healthcare stocks bucked the weak trend, with CSL and Ramsay Health Care gaining 1.8 percent and half a percent, respectively.

Amcor rose 1.2 percent after the packaging provider reported a 10.8 percent increase in profit for the nine-month period and raised its full-year earnings growth outlook range.

Construction materials supplier CSR surged over 10 percent as it reported a 61 percent jump in full-year profit.

Seoul stocks fell as authorities scrambled to track and test thousands of people who visited nightclubs at the center of one of the capital’s biggest novel coronavirus clusters.

Fears of U.S.-China trade tensions also dented sentiment after U.S. President Trump said he would not engage in any type of renegotiation of Phase One of the China trade deal and wants to see if China can “live up to the deal they signed” back in January.

The benchmark Kospi ended down 13.23 points, or 0.7 percent, at 1,922.17, with heavyweight Samsung Electronics and automakers like Hyundai Motors and Kia Motors falling 1-3 percent.

Meanwhile, New Zealand shares advanced, with the benchmark S&P/NZX 50 Index rising 0.5 percent to hit its highest level since April 20 at 10,818.67.

U.S. stocks closed mixed overnight amid fears that reopening the economy too quickly could fuel a second wave of coronavirus cases.

The downside was capped after New York Governor Andrew Cuomo announced that certain low-risk businesses and recreational activities can reopen statewide beginning May 15.

The Dow Jones Industrial Average dropped half a percent and the S&P 500 inched up marginally, while the tech-heavy Nasdaq Composite climbed 0.8 percent to reach its best closing level in well over two months.

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